Companies are also looking for higher-quality hires and specific skill sets
The competition for internal audit talent remains fierce, pushing salaries for in-demand internal auditors ever so higher. Two new salary surveys out from recruiting and staffing companies find that salaries for internal auditors at all levels continue to grow at a brisk pace.
A report from recruiting firm Parker + Lynch finds that the average internal audit director will earn an average of $163,000 in 2017 in total cash compensation, up from $145,200 in 2015 when the survey was last conducted. That puts the rate of growth at 6 percent annually, well above the average 2.8 percent wage increases for all professions over that time projected by the ERI Economic Research Institute.
Other internal audit positions have also experienced healthy growth rates, according to the Parker + Lunch survey, although at a somewhat more modest pace. Average salaries for staff auditors increased 5 percent from $51,800 in 2015 to $54,300 this year. The average internal audit senior will earn $81,500 this year—also a 5 percent increase—while internal audit managers will earn an average of $124,800, up 5.1 percent from 2015.
A separate survey from staffing and recruiting firm General Ledger Resources, conducted for the first time, put the average pay for internal audit staffers a little higher at a range of $68,000 to $85,000, seniors at $80,000 to $95,000, and managers at $120,000 to $150,000.
Anthony Thornburg, president of General Ledger Resources, says that a scarcity of good candidates is driving salaries higher. "I thought we had reached a zenith in demand for internal auditors about a year ago, but it has only intensified," says Thornburg. He says the most difficult jobs to fill are early- and mid-level career internal auditors. He also says they can be harder to find in secondary markets, such as smaller cities. "Salaries are growing fastest in certain markets where there is not a huge abundance of candidates," he says.
"The market for internal auditors is heavily candidate-driven," agrees David Fisher, a business development manager at General Ledger Resources. "They have the upper hand." He says the hardest individuals to find are those with two-to-three years of experience in internal audit who are looking to change jobs. "We call those 'purple squirrels' because they are so rare," says Fisher.
Compensation is also growing for chief audit executives and vice presidents, although at a slower clip. According to the Parker + Lynch survey, the top audit executive will earn an average of $228,900 this year, up 2.3 percent from $223,700 in 2015. Thornburg says the slower pace is due to the fact that there are more internal auditors who are looking to take the step to the highest level. "When we are looking to fill top audit positions, we have more candidates to reach out to," he says. Highmark lists a wide range of compensation for chief audit executives, stretching from $180,000 to $290,000 depending on the industry and size of the company.
While supply and demand is certainly a big factor driving the increase in internal audit pay, Duaine Smith, senior vice president and general auditor at Clear Channel Communications, says that internal audit departments are also looking for a higher caliber of professional than they have in the past and are willing to pay more to get them. "There is a demand for stronger people, and good people are always more difficult to find," he says. Smith says internal audit departments want candidates with better analytic, communication, and business skills. "Stakeholders are demanding more of internal audit, so the stakes are raised," he says.
Wade Brylow, director of internal audit at Northrop Grumman, agrees that many companies are looking for internal auditors with more business experience. He says internal auditors with specific skill sets, such a technology and data analytics, can be particularly difficult to find. At Northrop Grumman, for example, the internal audit department has had a data analytics position that has gone unfilled for almost two years. "It's very difficult to find candidates who are really good at data analytics," says Brylow. He adds that competition from other industries, particularly financial services firms, is driving salaries higher. "They can afford to pay a little more," he says.
One of the strategies Brylow has pursued is to hire internal auditors from within with skill sets that the internal audit department is lacking. "We are able to make the case that internal audit is a great place to work, a great place to get exposure to the whole business, and a good way to round out your business skills," he says. That strategy, however, hasn't worked as well in the pursuit of IT auditors, which Barlow puts the highest premium on. "Those are among the most difficult positions to fill," he says.
'Showing Them the Love'
Among the strategies for coping with the competition and higher salaries is to focus on retention efforts to keep the high performing internal audit professionals companies already have. "Smart companies are doing everything they can to hold on to their best people," says Thornburg. "For good internal auditors, managers are hugging them and showing them the love." He says that doesn't always mean higher pay. "They need to make sure they are building a good relationship with high performers," he says. That means giving them interesting and varied work and making sure that they have a path to advance in their careers.
At Clear Channel, Smith works to do just that. "You've got to hold on to your good people," he says. That involves providing opportunities for them to grow personally and professionally. To that end, he conducts quarterly "check-in" meetings to discuss how individuals are progressing and what their future plans are. "You can't wait for the annual review to see how they are doing," says Smith.
By that time, an unhappy internal auditor may go looking for a better deal. And, as the increasing pay trends show, there are plenty of them out there. Meanwhile, don't expect the growth of internal audit pay to slow anytime soon. "I don't see it peaking just yet," says Smith. "Demand is still on the rise. Internal audit is still a growth industry."